Global insurance prices jumped 22 percent year on year in Q4 2020, compared to 20 percent, 19 percent and 14 percent in the preceding three quarters of last year, according to Marsh’s Global Insurance Market Index.
The findings suggest that although things are still getting tougher for buyers, the rate of market hardening may have begun to taper off.
Speaking on Marsh & McLennan’s Q4 and full year result call, the firm’s president and CEO Dan Glaser said the Q4 22 percent increase marks the 13th consecutive quarterly rise in the commercial P&C market.
He said global property insurance pricing was up 20 percent in the quarter year on year. This follows an average increase of 21vpercent in the third quarter of 2020, 19 percent in Q2 and 15 percent in Q1.
Global casualty rates were up 7 percent in the last quarter, said Mr Glaser. According to Marsh’s index, casualty pricing rose 6 percent in Q3, 7 percent in Q2 and 5 percent in Q1.
Global finpro risks saw the biggest price rise in the fourth quarter, with an eyewatering 47 percent on average. Finpro rates were up 40 percent in Q3, 37 percent in Q2 and 25 percent in Q1, according to Marsh.
The broker added that US workers compensation pricing declined modestly in the fourth quarter of last year.
Marsh’s index is skewed towards large accounts. But Mr Glaser said SME pricing also continues to rise, though the magnitude of increases is less than for the bigger buyers.
“At the January renewals, commercial insurance market conditions remained challenging across products and regions. Risks are able to be placed, although at higher prices and in some cases with less coverage and stricter terms. Insurance carriers continue to push for rate increases in the face of losses, low returns and interest rates,” said Mr Glaser.
He added that 1 January reinsurance renewals ultimately settled at the lower end of early predictions. But “negotiations were lengthy and complex, with a significant focus on coverage and structure”, said Mr Glaser.